You are not alone. Every year several hundred thousand students arrive in Canada with hopes and dreams of graduating from some of the internationally acclaimed schools and universities located in various Canadian provinces. The Immigration, Refugees and Citizenship (IRCC) highlighted that at the end of 2021, more than 600,000 international students were studying in Canada on a valid study permit.
When moving to a foreign country for studies, many students are concerned about things such as adapting to the local culture, finding reasonable accommodation and managing finances to meet education and living expenses. International education is expensive and depending on which city you move to, the cost of living could be high as well. Therefore, planning your expenses and budgeting is a good way to keep your finances in check, avoid shocks, and potential student debt.
What is a budget?
A budget is a plan to organize your finances by considering the expected income and expenses for a specified time period. It’s basically managing how much money you have coming in against how much is going out, while putting an amount away for unforeseen expenses.
As international students, budgeting can help you:
- Educate yourself: It provides insight into your spending patterns and habits, enabling you to trim unnecessary expenses.
- Monitor and track: It helps you stay on top of your finances and serves as a guide to becoming financially independent.
- Prepare for the future: It ensures you have a plan to pay for any unforeseen circumstances, big purchases or life events.
|Learn the basics of finance in Canada and get essential resources as well as information you can rely on to make confident financial decisions. Take charge of your finances by downloading the International Students Finance Guide now.|
Budgeting can seem like an activity that takes a lot of time and effort but it really isn’t! Arrive has a simple, easy-to-follow, three-step process to simplify things and guide you every step of the way.
Student budgeting 101: Three quick steps to budget like a pro
Step 1: Jot down your income sources and expense categories
Listing out your income and expenses is a good way to gain clarity what you spend as a student and will help you plan for other expenses. Prioritizing expenses into categories such as education, housing, communications, food, transportation, clothing, medical, etc. will provide better visibility of your expenses, ensure better financial planning and management and help you stay on track to meet your financial goals.
Must Read: Budgeting tips for students in Canada
Remember to plan for major expense categories
Apart from the direct education-related expenses such as tuition, books, supplies, course material etc., don’t forget to plan for the major items:
- Accommodation: As an international student, you can choose to live on-campus or off-campus. Both options have their pros and cons, and cost is a major factor. Your accommodation expenses could vary depending on the type of arrangement: shared room versus single room on campus or living with roommates, alone, or with family off-campus. College or university websites are a good place to look for the exact costs for on-campus options and approximate costs for off-campus options. Don’t forget to budget for furniture and other household items if they are not included.
- Food and groceries: Groceries alone can cost you anywhere between $150 to $250 each month, and if you plan to visit a restaurant or order food online a few times a month, set aside $30 to $50 (plus tip) for each meal. If you’re living on-campus, your university or college may offer a meal plan that can help reduce this cost, as well as the time needed to shop for groceries or cook.
- Car insurance: If you plan to get a car, know that insurance costs for international students are usually on the higher side due to limited or no North American driving experience. At times, the cost of insurance can even be higher than the cost of renting or leasing a car!
- Phone and internet: Telecom services in Canada are likely expensive in comparison to your home country, so you may find yourself paying much more for phone and internet. Do your research and ask around before getting a new phone plan or an internet connection.
- Over-the-counter (OTC) and prescription medicines: Unless you have a private insurance plan that covers the cost of medicines, you will have to pay out-of-pocket for them which may end up being very expensive.
- Entertainment: Whether it is hanging out with friends after class or watching Netflix at home, don’t forget to budget for entertainment.
“I chose to live on campus because it worked out to be a cost-effective option for me. Most universities have their own accommodation options which are worth exploring. You can begin by checking the school website and then reach out to the admissions team when applying. They are always willing to answer queries. Accommodation can also be found in and around the campus; there’s something to suit every budget. You just have to be prepared to do the research, paperwork and complete the processes.”
— Shomik Roy, former international student, arrived in May 2018
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Step 2: Calculate savings (or deficit) and optimize to save more
As a next step, subtract your expenses from income to check your savings. If you notice a deficit, this is a good time to identify the areas where you can cut-back, refine or trim your expenses. If your study permit allows you to work part-time, you may be able to use your income to supplement your budget or add to your savings.
“I was conscious of the fact that I didn’t have the financial bandwidth to afford a Masters degree, yet motivated to pursue an international education, I applied to universities in Switzerland and Canada. I got through both but the Canadian university (UBC) offered me a Women in Business scholarship that covered 45 percent of my tuition fee, so that made it easy to pick Canada. To cover the rest of my fee, my family had to take a bank loan and hand loans from some generous individuals who stepped forward. I did not want to burden my family back home for further financial assistance and worked two jobs for the entire duration of my MBA to cover all living expenses in Canada — this, on reflection, I consider one of my key accomplishments on my path to self-reliance.”
— Swetha Kola, newcomer in Canada, arrived in August 2013
Step 3: Monitor, evaluate and revise
Budgeting is not a one-time thing but a constant work-in-progress. It’s important to periodically (preferably on a monthly basis) monitor your income and expenses and make revisions to best reflect your real-life scenarios.
The financial ecosystem in Canada may be different from your home country, and as an international student, it can take some getting used to but with the right information and resources, you’ll be prepared for success in your life, career and finances. As they say, “well begun is half done!”